17 Unique Ways to Spend Your Salary Wisely

how to spend your salary wisely

The world has changed and is still changing. Under the current economic circumstances, you might be struggling to maintain your way of life despite earning a salary. You might actually be getting less than what you were earning a few months ago. In such a situation, you could be wondering what the best ways are on how to spend your salary wisely.

In times of recessions or high inflation, it is tough maintaining or even living within a reduced budget. It is even worse if you do not have a budget.

To help you learn more about how to spend your salary prudently, I did some research. Below are tips, strategies and ideas that can guide you on how to spend your salary today in a better way.

17 Tips on How to Spend Your Salary Wisely Today

Here are tips and ideas you can use to ensure you spend your salary well today;

  1. Consider how much you need.
  2. Plan and know your expenses.
  3. Create a budget.
  4. Invest extra cash.
  5. Start a blog.
  6. Have a debt repayment plan.
  7. Take advantage of tax breaks.
  8. Set long term financial goals.
  9. Stop impressing people.
  10. Be prudent with your credit card.
  11. Manage your money habits
  12. Learn to save.
  13. Pay yourself first.
  14. Ensure you have insurance
  15. Have an emergency fund
  16. Shop thoughtfully
  17. Leverage technology

The above strategies can guide you on how to spend your salary in current circumstances. Learning how to manage your money or income is a skill you need, no matter how much you generate per month.

How to Spend Your Salary Wisely and in a Smart Way.

Earning a comfortable salary often misleads people into overlooking their financial future.

Unfortunately, only when their earning years have peaked or when there is an economic downturn do people realize that the annual salary they are receiving is not permanent.

Losing your salary is going to provide a reality check on your personal finances. When salary income dries up, you can find yourself in a very bad financial situation.

If you are still earning a salary today, you do not want to be caught off guard again.

You can avoid this situation by taking control of your finances and laying the bricks to a sound financial future.

Here are seventeen tips on how to spend your salary better that you can start practicing today:

  1. Consider How Much You Need.

It is important that you fully understand how much money or cash you need for your day to day living expenses.

That means that you should create a list of all expenses such as monthly rent, utility bills, groceries, food, transport to work and insurance.

Make sure to include everything that you spend cash on, whether it is a necessity or a desire.

Do not underestimate the small ticket items. Even a $10 monthly subscription to a media streaming provider can add up to $120 a year.

  1. Plan and Know Your Expenses.

You should plan your expenses very carefully. This includes a trip to the grocery store.

In fact, you should ensure you plan any trip that involves spending cash including meeting up with friends for a night out.

You might be thinking that planning is not useful. Actually, it is recorded that most people under-estimate the importance of planning for a salary.

Related: 11 Tips to Stop and Overcome Emotional Spending

However, establishing and practising the habit of planning can save you a lot of money in the long run. Can you think of the many un-necessary trips you make?

Have a schedule, whether it’s weekly or biweekly, and a detailed list of items you need to restock in.

  1. Use the 50-30-20 Rule.

To be able to manage your salary, you should create a budget. One of the ways on how to spend your salary efficiently is by using the 50 – 30 – 20 budgeting rule.

This basically means that instead of dividing your salary into very many things, you just put them into three major categories; spending, saving and investing.

Related: What is the 50/30/20 Budgeting Rule in Personal Finances?

In this regard, you should divide your salary into fixed costs, flexible costs and financial goals. If we are to apply the rule, then 50% of your salary would go to fixed costs, 30% to flexible costs and 20% towards your financial goals.

To further help you manage your salary better, fixed costs includes the bills and expenses that recur on a monthly basis. Flexible costs include day-to-day expenses that vary in amount and frequency such as eating out or cooking gas. Financial goals costs are those pertaining to costs related to building your financial future such as retirement and emergency funds.

  1. Invest Extra Cash.

It is extremely important to ensure that you have a mechanism to save and then invest. As discussed above, a portion of your salary should be kept aside as saving.

Once you have accumulated enough or substantial savings, the next action involves turning those savings into investments.

Investing your extra cash in such things as stocks and currencies is another way to boost your salary without having to work longer.

Online forex trading offers opportunities to make short-term gains from the ups and downs of currency pair prices.

One principle of investing that you should always keep in mind is to ensure you preserve capital.

  1. Start a Blog.

I know what you might be asking. How is starting a blog going to help me on how to spend my salary?

Let me explain.

Starting a blog is one of the ways you can invest part of your salary to generate more income. It is great way to add to your income and it can be passive.

For under $100, you can create a review website that earns hundreds or thousands of dollars per month very passively from affiliate income..

Plus your blog is an asset that you can sell once it turns cash flow positive.

I am a very big fun of blogging as an online business. If you would like to learn more about this and how you can start your won blog, go to this resource.

  1. Have a Debt Repayment Plan.

Interest accrued on outstanding debt, such as credit cards and mortgages, can cripple your personal finances. Pay them off as soon as possible.

As a way to manage and spend your salary wisely, it is advisable that you watch you use a portion of it to pay off and reduce your debts.

Related: 11 Ways to Pay Off Your Debt With Low Income

If you borrowed money to invest or start a business, make sure to pay the debt off as soon as you start generating revenue.

You can use an investment loan repayments calculator to see how much you should expect to pay in interest over a set period of time.

If you can repay the loan earlier than the agreed upon terms, make sure to exercise that option.

  1. Take Advantage of Tax Breaks or IRAs.

While individual retirement accounts are not a budget saver, they do help you grow your savings through better tax treatment.

Different types of IRAs are available including Roth, Rollover, and Traditional IRA.

With Roth IRAs, you make after-tax contributions and so you withdraw it tax-free when you retire. Rollover accounts, such as 401(k), handle cash that rolls over from certain types of retirement account. In a traditional IRA, you make contributions with cash that could be deducted to your taxes.

Related: 7 Benefits of Investing in 401k Saving Plans.

Talk to your employer or HR representative about ways on how to spend your salary better with contributions to retirement accounts.

When deciding on an IRA, you can use a traditional IRA like those on M1 Finance, or a non-traditional self-directed real estate IRA or gold IRA.

  1. Set Long Term Financial Goals.

In terms of ensuring that you are spending each coin you earn as salary well, it is important to think long term.

This means that you should set your long-term financial goals. They include home buying goals, your children education goals and retirement goals among others.

Continuously learning and adding on to your skill set can boost your earning potential.

Financial goals help validate that you are on the right track and that you are actually increasing your net worth over time. You will be able to allocate a portion of your salary towards these goals with some clarity.

  1. Stop Impressing People.

The average person spends far too much money merely trying to maintain an image.

From fancy cars to brand-name clothing, much of what we buy has more to do with impressing others than it does to do with purchasing something that we actually want and enjoy.

You should avoid joining this bandwagon.

I do not mean that you should not aspire to buy fine things in life. What am basically saying is do it for you, not because you need to impress other people.

However, “Keeping Up With the Joneses” is an expensive and unnecessary pursuit.

Buy the things that you yourself enjoy and do not fall prey to the feeling that you have to spend money in order to impress other people.

  1. Be Prudent with Your Credit Card.

Credit cards are not inherently bad on your finances. After all, they are convenient and many cards offer cash back on your purchases.

However, you should only spend money on your credit card if you are able to fully pay it off at the end of the month.

If you pay off your credit card balance each month, you will not incur any interest charges and it will essentially be the same as paying cash.

However, If you do not pay off your balance each month, though, the interest accrued can quickly spiral out of control.

That is why I will insist that the key word here is being prudent with your credit card. Use it to your advantage and avoid letting it control you.

  1. Manage Your Money Habits.

After you start tracking your finances, you can begin looking for habits that may be draining your budget.

These habits could include expensive hobbies, eating out too much, spending too much money on clothing, or any number of other financial drains.

Once you figure out which habits are eating up large portions of your income, you can then evaluate whether or not these habits are really necessary.

Managing your habits is one of the ways on how to spend your salary wisely, by understanding yourself better.

  1. Learn to Save Part of Your Salary.

Some people are naturally good at saving money and draw enjoyment from growing their wealth.

For others, money is something that is spent the moment it reaches their hands, and anything else feels like a wasted opportunity.

If you find yourself in the second camp, try to adopt a mentality that values savings over spending. You can use the 50-30-20 rule we discussed above.

In the end, money invested or money saved will almost always benefit your life more than money spent on products that will wear out or become uninteresting in little time at all.

  1. Pay Yourself First.

Working is a great thing. Earning is an even greater thing.

However, it is very easy for you to settle all other bills and pay everyone else while forgetting yourself.

The idea of paying yourself first is at the heart of the ways on how to spend your salary wisely.

‘Pay yourself first’ is a personal finance principle and strategy that promotes consistent and increased savings. This is a money-saving technique that focuses on paying your future self by saving before you spend your salary.

This means that you should always put away some percentage of your salary as a payment to yourself. It is argued that a 10% is a reasonable amount.

  1. Ensure You Have Insurance

One way to ensure you can mitigate against unforeseen issue is to have insurance cover.

This is part of your efforts to ensure you spend your salary wisely. Expense management is an important aspect of managing your finances and in particular your salary.

Look around for the best insurance solutions and negotiate for the best deal. Insurance provides peace of mind. Putting aside some amount every month to pay your insurance premiums is a good way to spend your salary income.

  1. Have an Emergency Fund

As part of your managing your salary, you should ensure that you have an emergency fund.

The way you build one is by ensuring that you set aside a portion of your salary each month into your emergency account. You could even have a standing order to automate this process.

As a principle, your emergency fund should have three or six month worth of living expenses.

This is to ensure that should you lose your salary, you will still be able to afford your monthly expenses for a period covered by the fund.

  1. Shop Thoughtfully.

We are always advised not to buy on impulse. Well, this advise sounds very good in theory.

What do should you do when you see an item you have wanted being displayed on sale? Do you buy it, even if you had not planned for it?

These are some of the issues you might be dealing with on a day to day basis. However, as a cardinal rule on how to spend your salary, you should avoid impulse buying at all costs.

Before you buy something, think about it. Think about how that one purchase will affect you in the future.

How long will it last? Is it going to put me in debt? Is the value I will get out of this over it’s lifetime worth the cost?

Asking yourself some of these questions before a purchase will ensure that you make thoughtful purchases.

  1. Leverage Technology.

In today’s world, you should not have an excuse in terms of how to spend your salary. This is because technology has made life much easier and better.

There are a number of platforms and mobile apps that can help you to manage your finances. You should take advantage of such and leverage the power of technology to ensure your finances are in order.

These ranges from budgeting apps, investing apps, apps to manage your daily expenses as well as banking platforms that ensure you have your financial information at your finger tips.

All these platforms and technology can very useful in providing date or information that will help you understand your financial habits.

You can use this information to ensure that you are well updated and informed on how to spend your salary each month. The dashboard provides you with great feedback.

How to Manage Your Money Wisely

Here are ideas on how you can spend or manage your money, including your salary wisely;

  1. Have a financial plan.
  2. Put aside short-term savings.
  3. Invest for the long term.
  4. Use debt or credit in a smart way.
  5. Choose where you live reasonably.
  6. Treat yourself.
  7. Always improve your financial literacy.

Related: 21 Simple Ideas on How to Manage Your Money Wisely

If you spend your salary wisely, you will be able to allocate it prudently. This will ultimately help you to grow your long-term wealth.

What is the 50 – 30 – 20 budget rule?

The 50/30/20 rule budget is a simple way to budget that does not involve detailed budgeting categories.

This budgeting rule reduces the amount of time you might need to spend on your salary details.

Instead, you spend 50% of your after-tax pay on needs, 30% on wants, and 20% on savings or paying off debt. That is what 50 30 20 means in regards to what to do with each of your salary paycheck.

This is an approach used in budgeting for your money. It can work when you are trying to allocate your salary to various budget categories.

Another approach you can consider when spending your salary is the 70 – 20 – 10 rule on money. 70% of your monthly budget should go to monthly expenses and 20% should go to savings. 10% goes to paying off your debts.


In conclusion, being able to get a job, and earn a salary is one thing. Spending your salary wisely is another thing altogether.

What I have provided above are ideas that are going to provide a framework that will guide you on how to spend your salary wisely under any circumstances.

I know you want to be financially stable and to earn more money. Even though earning is crucial, it is equally important to learn how to save or spend your current salary wisely.

It is important that you put in place measures and practice habits that help you to manage your salary, and probably ensure the salary lasts longer.

Taking time to manage your salary can really pay off. It can help you to not only pay your bills on time but also save some decent amount of money at the end of each year.

This will definitely help you to achieve your financial goals that you may have set for yourself. You can now easily travel to your dream destinations, pay off your debts, buy yourself a new car or any other expensive gadget like a luxury watch.

All you need to do is to make a list of your expenditures and prioritize them. You should plan everything and control your expenses. Ensure you always decide on a fixed amount that you can put aside each month so that you do not have to worry about an extra expense for any special occasions like lavish birthday parties or wedding anniversary dinners.

If you have been wondering; how do I spend my salary? This is the ultimate resource to help you spend and manage your salary like a pro. You can use the tips and strategies in this article to improve your personal finances.

Related: Tips and Ideas to Manage Your Personal Finances